EURUSD Analysis September 2015 (D,M)
Created on Sunday, 30 August 2015 02:37
Written by Austin Galt
The Euro continues its bear rally as expected so let’s review the action using the daily and monthly charts.
EURUSD DAILY CHART
The Bollinger Bands show the recent high traded well above the upper band consistent with solid tops. Price is now back to the middle band and while some support may come in here I favour the final pullback low to be back at support from the lower band.
The RSI showed a new high which is generally bullish. Once this correction is done I expect a move to new price highs that sets up one or more bearish divergences.
The Stochastic and MACD indicators are both bearish indicating lower prices are likely.
I have added Fibonacci retracement levels of the recent move up. Price is currently back at the 61.8% level which may provide temporary support while I favour the final pullback low to be at least back to the 76.4% level at 1.1022 and possibly as low as the 88.6% level which stands at 1.0911.
I have drawn a Fibonacci Fan and I am looking for the pullback low to be around support from the 88.6% angle.
EURUSD MONTHLY CHART
There is no change to the long term outlook which calls for a significant bear rally up to around the 61.8% Fibonacci retracement level of the recent move down. This stands at 1.2644.
This level is above two previous swing low levels denoted by the horizontal lines standing at 1.11877 and 1.2044 respectively.
The Bollinger Bands show price is now targeting the middle band while I favour the final rally high to be at resistance from the upper band.
The PSAR indicator now has a bullish bias after price busted the dots on the upside in August.
The RSI showed a new low at the recent major low which is bearish in that after the expected rally high price should hit new lows and set up a bullish divergence.
The Stochastic indicator is bullish while the MACD indicator has just made a bullish crossover.
The low in August was at 1.0848 and I expect the low in September to test this low but not break below. Then the bear rally should fly higher once again.